Professional Practicum Contract Management HFMA Certification Professional Practicum Contract Management Knowledge and skills in this contract management area: - Identify key components and common terms of a contract - Identify key components and common terms of a healthplan/payer contract - Be able to discuss criteria-based contracting and create an evaluation model

Contract Management Function 13% - 17% of the exam Functional focus: Monitoring contracts to ensure performance compliance This area is 13% to 17% of the exam Key idea assessed- contracting Contracts are used to define terms between two or more parties for the provision of a service or product. In healthcare, contracts are used for construction projects, collection services, maintenance on equipment, leasing space, contracted nurses or other staff, and a variety of other items.

Contract Management Function What makes a contract valid? Provisions Price Authority Legal services and products For a contract to be valid, two (or more) individuals: - must agree to the provisions of the contract, - must agree to the price (or promise), - be legally competent or authorized to enter into the contract, and - the contract must be for services and products that are legal.

Contract Management Function Assessing a contract Understand legal terms Read the contract for the financial benefits it offers Summarize the ‘gives’ and ‘takes’ of the proposal Identify loopholes Identify individuals on your team who have contract-related skills such as being able to: - understand legal terms - read the contract for the financial benefits it offers - summarize the ‘gives’ and ‘takes’ of the proposal - identify loopholes

Contract Management Function Boilerplate Provisions Choice of law Notice Modification of Agreement Entire Agreement Severability of Agreement Execution Separate Exhibits Force Majeure Survival Necessary Acts Confidentiality Representation/Signatories Ambiguities Boilerplate provisions are important because they affect your and the other party’s rights. These provisions or clauses are common to most contracts. Can you define them and state their purpose? The purpose of boilerplate provisions is to save the parties and drafters of contracts time with commonly used language. Although, the clause may be labeled as a boilerplate provision, it can still be tailored to meet your specific contracting requirements. Always read ALL sections of any contract before signing it.

Contract Management Function Common Uses of Contracts in Healthcare Finance Services of an external auditor Health plan/payer contracts Banking services Collection agency Contracting for temporary billers or other staff Engaging a scanning company to scan files and destroy paper files Equipment maintenance (shredders, copiers, printers and other equipment) Maintaining applications by providing upgrades to and education for the software used Contract use in healthcare finance is extensive: not the range of functions and responsibilities employing contracts Much of this module is focused on health plan/payer contracts since they have a significant impact on healthcare finance

Contract Management Function Contracts with Health Plans & Payers Indemnity/commercial insurers, Preferred provider organizations (PPOs), Managed care organizations (MCOs) such as health maintenance organizations (HMOs), exclusive provider organizations (EPOs), and accountable health plans (AHPs), Other health plan/payer related entity Healthcare financial managers often are involved in evaluating, developing, and monitoring contracts between the healthcare organization (HCO) or provider and the health plan/payer. These provider/health plan/payer contracts may be between: - indemnity/commercial insurers, - preferred provider organizations (PPOs), - managed care organizations (MCOs) such as health maintenance organizations (HMOs), exclusive provider organizations (EPOs), and accountable health plans (AHPs), - or other health plan/payer related entity

Contract Management Function Common Health Plan Contract Provisions and Definitions Claims submission requirements Clean claim Claims payment requirements Definition of day in per diem contracts Definition of emergency services Common Healthplan/payer Contract Provisions and Definitions Claims Submission Requirements. A typical healthplan/payer contract will define the claims submission parameters for providers to obtain payment. These parameters include defining a timeframe for claims submission (e.g., 45 days). The standard timeframe varies by health plan and by state. It is important that providers and healthplan/payers be aware of any statutes within their state (typically falling under the prompt payment laws) that define specific claims submission requirements. Clean Claim. Another typical parameter of claims submission is the requirement to submit clean claims. A clean claim is generally defined as a claim that includes all of the necessary data fields for a healthplan/payer’s system to be able to properly process the claim. It is important for providers that the definition of a clean claim be clearly defined in the contract (preferably in the definition section). Claims Payment Requirements. The contract should include specific requirements for health plans to pay claims within a defined period (for all claims that have met the submission requirements). Almost all states have established timeframes for payment in their prompt payment laws. Definition of Day in Per Diem Contracts. When payments are made under this structure, it is important for providers to avoid language defining a day as “in the 24-hour period before the midnight census.” Definition of emergency care The provider should be mindful to avoid language requirements to seek preauthorization for the provision of emergency services in violation of EMTALA

Contract Management Function Common Health Plan Contract Provisions and Definitions Incorporation of other documents Access to data Unilateral changes Cost of living rate adjustments Retrospective Payment Denial Dispute resolution Common Healthplan/payer Contract Provisions and Definitions Incorporation of Other Documents (Provider Manuals, Plan Policies, and Procedures). It is typical that this document be separate from the actual contract because it is often necessary for healthplan/payers to update their policies and procedures to meet state, member, provider, and other market factors requiring change. Access to Data Both health plans and providers gather specific patient and member data that is important for the other to access. These data include claims payment data, member eligibility data, member demographic data, patient service authorization and referral data, and other information. Unilateral Changes. Certain policies and procedures will need to be amended by the health plan to meet regulatory requirements and changing market demands. Annual Cost-of-Living Rate Adjustments for Multiyear Contracts. It is reasonable for providers to negotiate annual Consumer Price Index (CPI) (or inflation) adjustments to rates for multiyear contracts. Retrospective Payment Denial. Most states have laws or court decisions restricting health plans from retroactively denying payment for claims for which coverage was verified or services were preauthorized (except in cases in which the member was ineligible for coverage). Dispute Resolution. A standard contract may call for binding arbitration as the method for resolving disputes. An arbitration proceeding is similar to litigation

Contract Management Function Common Health Plan Contract Provisions and Definitions Allowance/prohibitions against litigation Appeals Common Healthplan/payer Contract Provisions and Definitions Allowance or Prohibition against Litigation. Providers have increasingly pursued litigation over the past several years to settle disputes such as underpayments, late payments, and other allegations of contract breach. Appeals. The standard contract should include language describing a fair and objective appeals process for the provider to appeal adverse payment decisions on a day-to-day basis.

Contract Management Function Evaluating health plan/payer contracts Contract language Reimbursement levels Financial, operational and legal parameters acceptable to both parties Evaluating Provider/Health plan/payer Contracts The written contract between the provider and healthplan/payer defines the rights and obligations of the parties under the health plan/provider relationship. It is important that the parties review: Contract language Reimbursement levels Financial, operational, and legal parameters acceptable to both parties Evaluation criteria should be established by management to identify and prioritize desired contract features before entering contract negotiations. Once the criteria are established, then a model for evaluating the proposed contract can be created

Contract Management Function Contract evaluation model Payment rates Covered lives Claim complexity Preapproval/utilization review requirements Carve- outs Risk for the provider The evaluation model: Breaks a contract down into its parts -Payment rates -Covered lives or insured in this region -Claim complexity -Preapproval or utilization review requirements -Carve-outs[i] -Any risk for the provider - Allows the proposed healthplan/payer requirements to be compared against and scored to the criteria (preferences or ideals) of the provider - Summarizes the degree to which a proposed contract satisfactorily meets the provider’s expectation - Helps the organization to stay focused on its goals - Avoids contract ambiguities or concerns later.

Contracting Management Practicum